Google Fiber In Austin Hits a Snag: Incumbent AT&T

AcidPenguin9873 writes "Earlier this year, Google announced that it would build its next fiber network in Austin, TX. Construction is slated to start in 2014, but there's a hitch: AT&T owns 20% of the utility poles in Austin. The City of Austin is considering a rules change that would allow Google to pay AT&T to use its utility poles, but AT&T isn't happy about it. The debate appears to hinge on a technicality that specifies what types of companies can attach to the utility poles that AT&T owns. From the news story: 'Google 'would be happy to pay for access (to utility poles) at reasonable rates, just as we did in our initial buildout in Kansas City,' she said, referring to Google Fiber's pilot project in Kansas City...Tracy King, AT&T's vice president for public affairs, said in a written statement that Google "appears to be demanding concessions never provided any other entity before. ... Google has the right to attach to our poles, under federal law, as long as it qualifies as a telecom or cable provider, as they themselves acknowledge. We will work with Google when they become qualified, as we do with all such qualified providers," she said.'"

Comments

ISPs: stupid, monopolisitic

[i kan reed]

There's not a lot to say in favor of [local telecom] just about anywhere in the U.S. Their margins are higher than any other substantial industry, and yet they're constantly in fear of even microscopic changes, pushing absurd protectionism through every level of government.

Re:ISPs: stupid, monopolisitic

[sqrt(2)]

Decades of absurd protectionism is how they achieved those margins. It's their only viable business model at this point. They are terrified of becoming a provider of a commodity product, a dumb pipe for bits that anyone can compete with. There's no easy way for a business to justify readjusting to lower (realistic) profits after raking in unreasonable amounts of money for so long. It'll look like a huge loss to their investors, and not what it really is; a return to sane market equilibrium and healthy competition. Investors will consider the leadership to have failed massively, and they'll be held accountable. So the leaders are doing what they can to stop it. It's a perverse system.

Re:ISPs: stupid, monopolisitic

[Sarius64]

Exactly. On top of this, AT&T wishes to compete with Google as an ISP but under the guise of a telco instead. Whereas in San Diego, for instance, AT&T used their ISP status to force fair use on the existing utility conduits established by Cox and Time Warner. Seriously praying for Google to come to San Diego. Reno too for the rest of the family. :)

A monopoly wants as little competition as possible

[Crashmarik]

No surprise from ATT, I doubt anyone expected anything from them except obstructionism. Cheers to the City Council for taking action that is obviously in their constituents best interest.

Just to get this straight

[MightyMartian]

So, just to get this straight, a company who gained its position through a helluva lot of taxpayer dollars, much of it in the form of last mile access on public lands, now decides it has some ethical and moral right to block a competitor.

I say that every single time one of the old telco descendants does this, they are sent a bill with interest for every nickel directly or indirectly they received from the public purse, payable immediately.

Re:Just to get this straight

[Attila Dimedici]

No, AT&T is not claiming some ethical and moral right to block a competitor. They are claiming a legal right to do so. They do not spell it out, but it seems to me that they are, also, claiming a legal obligation to do so (although that impression may be a misreading of the reporters interpretation of their statement).

Re:Just to get this straight

[girlintraining]

So, just to get this straight, a company who gained its position through a helluva lot of taxpayer dollars, much of it in the form of last mile access on public lands, now decides it has some ethical and moral right to block a competitor.

Actually no. They have no ethical or moral rights and never has. They are a business, not a person, and federal law be damned. What they do have, however, is a legal right, purchased through years of lobbying efforts to our legislators, who are now thoroughly corrupted -- 97% of our candidates for federal positions who won had more money than their opponent. Democracy at work.

The only reason that Google might bust them up on this is because everyone loves Google, it's new and hip, while AT&T sounds like some 60s throwback dinosaur that can safely and quietly be shoveled out the door or sacrificed on the altar of public opinion. And Google knows this!

Funny ...

[gstoddart]

Funny how AT&T gets an easement to use public (and sometimes private) lands for this, and then over time it becomes 'their' property to be used at their discretion.

In other words, the incumbent who got there by using public resources is now acting like they're private resources.

Such horse shit, and just more of governments allowing corporations to own what it essentially infrastructure paid for and used by all of us.

Free Market Lies

[Daemonik]

This is why free market utopianism is such a crock. Business do not want to compete with each other and will use every ounce of their power & every legal trick they can create to prevent an upstart from disrupting their markets.

Ironically the only way to have a free market is if the government forces them to.

Re:Free Market Lies

[Danathar]

You assume a government free of control by outside forces.....

Re:Free Market Lies

[Anonymous Coward]

"This is why free market utopianism is such a crock."

I call BS. This is a perfect example of how government intervention disrupts free markets. It is not that AT&T owns the telephone poles in question. It is the government regulation that AT&T is using to block a competitor from also being allowed to use those poles. AT&T knows it provides terrible service (I used to live in Austin) and does not want the government to dictate to it that it must share a resource paid for by the public under government dictate (those little fees on your phone bill and the rates of your phone bill were deternined by government regulations to provide for the cost of erecting telephone poles). This problem simply would not exist unless for regulated markets, and AT&T is still so reliant on regulation to keep its business model working that it might as well be called "Government Telephone and Telegraph." This is precisely and exactly an example of where government regulation completely distorts the free market.

Re:Free Market Lies

[MobyDisk]

The entire point of the article is that there is no free market here. So you have drawn the wrong conclusion.

The problem is that AT&T has been granted local monopoly power over utility poles while monopoly power as the local telecom company. If they were a for-profit company who built and maintained utility poles, they would have incentive to get as many wires onto those telephone poles as they could safely fit. This is why many states are deregulating power by separating the local power company, who maintains the power lines, from the power providers who put power onto those lines.

Re:Free Market Lies

[MightyYar]

I don't think there are very many people who believe in a free market "utopia". It's just that many people rightly point out that free markets tend to be more efficient than governments. This is great when efficiency takes priority over all else - like, say, the cost of a roll of scotch tape. For things like utilities, most people agree that there are other factors besides raw price that are important: wires strung all over the place is ugly and complicated, and yet restricting to a single right-of-way tends toward monopoly over the lines. The difficult bit is managing the tradeoff between government corruption and inefficiency versus free market weirdness like supply and demand instability and exclusion of non-economic considerations.

There is not and there never will be a "right" answer or a correct balance - every possible solution has pros and cons. Like any dynamic system, caution should be taken when making adjustments. Just as violently shifting an aircraft's controls will lead to instability, suddenly changing the rules of commerce can lead to things like rolling blackouts in CA.

Back on topic, tweaking the utility pole rules to allow Google to hang fiber on them seems like a reasonable path forward.

Re:Free Market Lies

[Daemonik]

You act as though the regulations came out of a vacuum. AT&T lobbyists created those regulations and their pet congressmen & senators enacted them. Because the regulations limit who can compete against AT&T.

If corporations had no influence on government, THEN you could cry about government intervention. Every person with a functioning brain, however, knows that corporations are deeply mired in our politics and they heavily influence what regulations will effect them.

Funny AT&T Sunsetting POTS

[Anonymous Coward]

So AT&T wants to sunset POTS, but still claim to be a telco? lol

Re:Google will have their way

[ron_ivi]

torches and pitchforks parade at the AT&T offices

Isn't this almost exacty what Eminent Domain laws are designed for. If some private company's blocking use of resources important to public or civic use (those cable right-of-ways) the government pretty much gets to take them and pay whatever it says they're worth. Or do they only use those laws to kick out poor people for huge corporate developers?

Proves the case for city owned fiber...

[Anonymous Coward]

I own an apartment complex with 132 units. We own the fiber/CATV cable/ethernet cables from the complex telcom room out to each unit.

FIOS, RCN, Comcast and DISH are all present in the telcom room. Tenants can order up service from any of those vendors. We also offer an internet only option. If a new vendor wants to offer service to our complex, they have to get to the telcom room, but from their its easy to compete. If Google came along, they could offer service from our telcom room to the entire complex.

This works really well, and I think the concept should work on a city-wide level as well.
City owned fiber, commercial providers on an even footing.
Lower costs, better service.

Re:Free market? Gov't gave AT&T the ROW to beg

[mythosaz]

..the spirit of the original deal.

...and thousands of lawyers burst into laughter...

Re:Google will have their way

[timeOday]

Do people not even read the summary any more? What AT&T wants is for their competitor, google, to be regulated as a utility, as AT&T is, before using the utility poles. It's not that unreasonable. If the outcome is that the regulations are out of date and eased for both AT&T and google, that's fine too.

Re: Google will have their way

[TWiTfan]

google can use the poles, you just have to be a cable provider or telecom

I imagine that AT&T-owned legislatures will make their certification as a telcom or cable provider about about as easy as it would have been for Malcolm X to get a voter registration card in Mississippi.